Archived: Bible College of Queensland, charity review

This is a charity review, a review for those with an interest in the Australian charity Bible College of Queensland (BCQ).

It is structured according to the charity’s entry on the ACNC[i]Register, and its purpose is to supply some information extra to what is there, information that may be helpful to you in your decision about BCQ.

It is up to you to decide whether any or all of the information presented here is what you need in order to make that decision, and whether you should seek any other information, either from the charity itself or from other sources.

Ministry response

Prior to publishing this review, I sent my observations to the charity, on 23 December 2015, and invited them to comment. They did not respond.

Organisation of this review

• The first part of this review is organised according to the headings in the Register entry. This is how to use this section of the review:
  1. For each heading in the register entry, first read the information under that heading.
  2. Then check if that heading is included below. (Headings for which there is no comment are not included. This also applies to the Financial Report.)
• There is then a more detailed comment on the Financial Report.
• Lastly, there is a section Membership of accountability organisations claimed.

Sources

• ACNC Register (including links)
• Google search on the charity’s names (see Charity Details, below).
• BCQ website. BCQ on Facebook. Plus BCQ on LinkedIn.
• State government fundraising licence registers.
• www.glassdoor.com

REGISTRATION DETAILS

Entity Subtype

• As expected for a bible college, a subtype consistent with sharing the Gospel.
• The company’s principal object is also about ‘advancing religion’:
  • The Company’s principal object is to establish, maintain and conduct colleges where students may obtain a sound Christian religious education.

CHARITY DETAILS

Legal Name

• BCQ is a public company, a company limited by guarantee.
• It is permitted to omit ‘Ltd’ on the end of its name.

Other Name(s)

• Former names: Crossway College, Bible College of Queensland, Queensland Bible Institute[ii].

Charity ABN

• Tax deductibility: You can claim a tax deduction for a donation to BCQ.
• As you can for a donation to either of its two funds, Qld Bible Institute College Building & Maintenance Account, and Bible College of Queensland Library Fund.

Charity Address for Service

• I have no reason to believe that this doesn’t work.

Charity Street Address

• No postal address on the website.

Email

• I have no reason to believe that this doesn’t work.

Phone

• Try this one, from the website: (07) 3870 8355

Website

• Try http://bst.qld.edu.au/.

ANNUAL REPORTING

• AIS 2014
  • This is BCQ’s compulsory Annual Information Statement 2014 (AIS 2014).
  • • It gives basic financial information. If you think that this is sufficient for you, please note:
      • ‘Donations and bequests’ should be $41,179, not zero.
      • Special purpose financial statements not ‘Transitional financial statements’ were submitted.
• Financial Report 2014
  • The report was signed two months after the year end.
  • It was then lodged one month after that.
  • The coverage of finances in this review is left until the financial report proper (see Latest financial report – detail, below).

ABOUT THE CHARITY

• Statement of Faith

• • What beliefs motivate and guide us, half way down here.
  • There is no statement of faith, or similar, in the BCQ constitution.

Date Established

• The last two sections here give a brief history.
• Wikipedia has a very short unofficial history.
• For the keen, here’s a whole book on the history of BCQ before it was BCQ.

Who the Charity Benefits

• Vision and Mission
  • None found.
  • This is their What we want our students to do:
    • Know God’s word; take it to the world.
  • And this is their How we make that happen:
    • By offering high-quality, Bible centred theological training in a diverse and supportive community, shaping the whole person for God’s purposes. Aiming for more than simply growing students’ knowledge of theology, we’re developing passionate, capable disciples who use what they know about God’s word to serve him in the church and the world.
• Activities (What did BCQ do?)
  • From the Description of charity’s activities and outcomes in the AIS 2014:
    • We provided higher education in the Christian faith at undergraduate and post graduate level.
• Outcomes (What did BCQ deliver?)
  • BCQ did not respond to the request in the AIS 2014 for a description of its outcomes.
  • Nothing found on the website.
• Impact (How were people’s lives improved?)
  • Nothing found.

Financial Year End

• This means that the next financial report is due by 30 June 2016. Before that the financial information on the Register will be up to 18 months out-of-date.

WHERE THE CHARITY OPERATES

• Operating State(s)[iii]
  • BCQ holds a fundraising licence in its home state.
  • Whether it needs one in the other six states depends on whether those states think that BCQ, by calling for donations on their website, are ‘fundraising’ in their State.

Size of Charity

• With a revenue of $1.28 m, BCQ is just over the threshold for the largest of the ACNC three size categories (‘Large’).

CHARITY’S DOCUMENT (SIC)

• There is no Annual Report/Review available on the ACNC Register.
• Nor on the BCQ website.

RESPONSIBLE PERSONS

No. of Australian ‘responsible person’ positions[iv]

Neil Conwell                                3

Leon Ghavalas                             1

Terence Leister                            1

Robert Paech                               1

Megan Verhoef                            2

Elizabeth Stoltz                           2

Samuel McGeown                       1

Richard Gibson                            1

Peter Farrington                          2

Ian Case                                         1

• This listing matches that on the website.
• But differs from the position at 27 February 2015 shown in the Directors’ Report:
  • Richard Coulson, Maxwell Hardy, Rhys Morgan, and James Shanks are no longer on the board.
  • Ghavalas, Leister, and Verhoef have been appointed since.
• There is a short biography on the current directors available by clicking on their name in the above link.

(End of review of the ACNC Register information)

Latest financial report – detail

• The directors’ belief that BCQ is not a ‘reporting entity’, a choice that allows them to make less than a full disclosure about BCQ’s finances and operations, seems to be a clear contravention of their claim that the accounts show a ‘true and fair view’.
  • Given that industry expert Carmen Ridley says that it is difficult for a NFP to be other than a reporting entity[v] the directors’ give insufficient evidence to rebut the presumption that a college with hundreds of students and staff, and that seeks donations from the public, would not be willing to tailor a financial report for anybody who requested one.
  • What, for instance, is the difference between BCQ’s situation and that of Morling College?

Directors’ Report (page 2 of the Financial Report)

• No such report is required by the ACNC.
• Missing section: Objectives
• Incomplete sections: ‘Performance measures’ (what are they?), and ‘Directors’ (their experience)

What was earned, what was consumed during the year – the Statement of Comprehensive Income (page 4 of the Financial Report)

• The following expenses are not disclosed:
  • Administration
  • ‘Finance costs’
  • Fundraising?
  • Superannuation expense

Where the earnings came from (including Note 2)

• Student fees, board, functions $1.09 m comprise 86% of income.
• The next largest source is Rental of communication tower $110K, 9%.
  • An unusual item, yet no explanation. Presumably the tower is not owned by BCQ.
• Donations $41K: why is zero shown in the AIS 2014 for ‘Donations and bequests?
• Interest received $19K
  • This should be ‘Interest revenue’.
  • Why is interest not accrued?

What was consumed during the period (reordered by size)

• Employee benefits expense $872K
  • From the workforce disclosed in the AIS 2014, and assuming the casuals average 10% of full-time and the part-timers 50%, this represents an average package of $68K p.a.
• Other expenses from ordinary activities $365K
  • Other than $6K for the auditor, we are not told what is in this figure.

What’s left at the end of the year – the Statement of Financial Position (page 5 of the Financial Report)

Assets

• Cash and cash equivalents $603K (including Note 3)
  • Gift fund $28K: BCQ has two tax deductible funds. Each should be shown.
• Accounts receivable and other debtors <$1k (including Note 4)
  • Where’s GST receivable? (GST payable is zero
• Property, plant and equipment $6.24 m (including Note 6)
  • Freehold land $5.37 m
    • The valuation is out-of-date.
  • Buildings $163K
    • The valuation is out-of-date
  • Building improvements $277K
    • Why are these separate from ‘Buildings’?
  • Building development costs $5K:
    • Why are these separate to ‘Buildings’ and ‘Building improvements’?
    • Why is the disclosure different from Buildings’ and ‘Building improvements’?
  • Plant and Equipment $33K
    • What type of ‘plant and equipment’? All the rest are itemised.          
• Reserves $6.24 m (including Note 9)
  • There is no explanation for the reduction in the ‘Asset revaluation reserve’.

Liabilities

• Accounts Payable and other payables $170K (including Note 7)
  • Exempt benefit balances $48K: There is no explanation of this unusual item.

Where the cash came from and went to – the Statement of Cash Flows (page 7 of the Financial Report)

• Cash Flow From (sic) Operating Activities
  • No donations and bequests are shown
• Cash flows (sic) used in Financing Activities
  • Why is the reduction in borrowings not shown?

Essential information to go with the figures – the Notes to the Financial Statements – page 8 of the financial report

• Missing from the preamble
  • Whether the directors have the power to amend and reissue the financial statements
  • Functional and presentation currency
  • Registered office and principal place of business.
• Note 1   Summary of Significant Accounting Policies
  • The directors say the company is a ‘not a reporting entity’, ‘because there are no users who are dependent on its general purpose financial statements’.
    • They are in effect saying that anybody who is interested in this company has the power to contact the company and request a report tailored to their particular needs. This is highly unlikely and there is no such invitation on the website.
      • This is despite the fact that BCQ has hundreds of students and staff and has, on the internet, a standing invitation to donate.
    • The result of the decision is that the accounts don’t comply with the Australian Accounting Standards, and can disclose considerably less than that required for a general purpose report, a report designed for those people who are dependent on the charity’s report for the information they need.
    • You can compare the directors’ decision to this advice from the ACNC:
      • If people use and rely on your charity’s financial statements to help them make decisions (for example, about how to spend money) then your charity is most likely a reporting entity.
        • Although not clear from this, the directors should also consider prospective users.
  • The specific Accounting Standards that were followed are not disclosed
  • a. Revenue
    • The policy on the main revenue item, fees, is not disclosed.
    • BCQ doesn’t receive any grants, so the policy is not relevant.
    • Why, if accrual accounting is being used, is interest only recognised when it is received?
    • What revenue is earned from delivering a ‘service’ to ‘customers’?
  • b. Accounts Receivable and Other Debtors
    • Fees outstanding are not mentioned.
    • If donations and bequests are recognised on receipt (see a. Revenue), how can there be debtors?
    • BCQ doesn’t receive grants so there shouldn’t be any grants receivable.
  • c. Property, Plant and Equipment
    • Buildings are not Plant and equipment.
    • The policy on write downs is duplicated.
    • The policy on derecognition is not disclosed.
    • The listing of depreciation rates does not match the assets held.
  • e. Employee provisions
    • These are not shown, as claimed, as ‘accounts payable…’ in the ‘statement of financial positions’.
  • f.   Cash and Cash Equivalents
    • There is no bank overdraft, so no need for a policy.
  • g.   Goods and Services Tax (GST)
    • The policy on commitments and contingencies is missing.
  • k. Critical Accounting Estimates and Judgements
    • None are disclosed.
  • Missing policy Notes:
    • Current and non-current classification
    • Fair value measurement
    • New, revised or amending Accounting Standards and Interpretations adopted
• Note 6: Property, Plant and Equipment
  • The required reconciliation of written down values is missing
• Note 10: Cash Flow Information
  • Two of the figures under ‘Changes in assets and liabilities’ do not match the Statement of Financial Position.
• Missing Notes
  • Commitments
  • Events after the reporting period

An independent opinion on the financial statements – the Independent Auditor’s Report (the second last page of the Financial Report)

• This is a ‘clean’ opinion.  Read here and here to draw the right conclusions from this.

Membership of accountability organisations claimed

• None claimed. BCQ is, however, a member of Missions Interlink.

(End of review)

[i] Australian Charities and Not-for-profits Commission, Australia’s national regulator of charities.

[ii] From the ASIC (www.asic.gov.au) database, 20.12.15.

[iii] This is how the ACNC explains ‘operating locations’ in their application guide: ‘You need to give details about where in Australia your organisation conducts (or plans to conduct) its activities.’

[iv] Because of the possibility of two (or more) directors having the same name on the register of responsible persons, it is not possible to be definitive about the number of directorships held.

[v] FastClass: Annual financial statements for NFP – Online, www.cpaaustralia.com.au, accessed December 2015.